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What are the pros and cons of becoming an accountant?

What are the pros and cons to becoming a limited company?

  • what are the pros and cons to becoming a linited company

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    ADVANTAGES OF THE CORPORATION - Limitations of the stockholder's liability to a fixed amount of investment. However, do not confuse corporate liability with appropriate liability insurance considerations. - Ownership is readily transferable. - Separate legal existence. - Stability and relative permanence of existence. In the case of illness, death, or other cause for loss of a principal officer or owner, the corporation continues to exist and do business. - Relative ease of securing capital in large amounts and from many investors. Capital may be acquired through the issuance of various stocks and long term bonds. There is relative ease in securing long term financing from lending institutions by taking advantage of corporate assets and often personal assets of stockholders and principals of guarantors. - Delegated authority. Centralized control is secured when owners delegate authority to hired managers, although they are often one and the same. - The ability of the corporation to draw on the expertise and skills of more than one individual. DISADVANTAGES OF THE CORPORATION - Activities limited by the charter and by various laws. However, some states do allow very broad charters. - Manipulation. Minority stockholders are sometimes exploited. - Extensive government regulations and required local, state, and federal reports. - Less incentive if manager does not share in profits. - Expense of forming a corporation. - Double tax - income tax on corporate net income and on individual salary and dividends.

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Pros. Tax breaks, personal property cannot be used as assets should the company fail (unless the directors were entirely to blame/were fiddling). Thats about it Cons. filing annual accounts (although this has changed) registration with companies house - meaning everything about the company is open to all. Bank charges - they like to charge Ltd co.s more for banking I am sure there are loads of other pros and cons but that is all I can think of off the top of my head.

Pros Separate legal entity and, in theory, your personal liability is limited. That can be removed if you're the only director. When doing business with other businesses, their perception is that you're possibly bigger than you are and more established and they like doing business with businesses like them Cons The biggest one is if you want to close down the company as there's a lot of paperwork involved. Setting up a limited company is not difficult nor need it be expensive. (We've set up two ourselves) The annual return is not difficult to do - you can do it on-line and it only costs £15 and takes a few minutes You do need proper accounts to submit annually, which means accountant's fees. Those are the biggest expense so it pays to shop around Yes, people can do searches at Companies House on you and your companies but, if you've nothing to hide, what's wrong with that? Visit the Companies House site for more information on limited companies. If you're thinking of starting in business, rather than this being a coursework question, and you're in the UK, speak to your local Business Link who have lots of free information on the differences between limited companies, partnerships and sole traders.

Rosemary P

pros if it goes **** up, then they can only go after the company assets and not your home. cons its a nightmare to set up.

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